FREEZE IN PAYMENTS FOR PHYSICIANS’ SERVICES; EXTENSION OF SEQUESTER ORDER.

SEC. 4041. FREEZE IN PAYMENTS FOR PHYSICIANS’ SERVICES; EXTENSION OF SEQUESTER ORDER. (a) Three-Month Freeze on Increases In Physician Payments.— (1) In general.— Section 1842 of the Social Security Act (42 U.S.C. 1395u) is amended— (A) in subsection (b)(4)— (i) in subparagraph (A), by redesignating clause (v) as clause (vi) and by inserting after clause (iv) the following new clause: “(v) In determining the prevailing charge levels under the third and fourth sentences of paragraph (3) for physicians’ services furnished during the 3-month period beginning January 1, 1988, the Secretary shall not set any level higher than the same level as was set for the 12-month period beginning January 1, 1987.”, and (ii) in subparagraph (B), by adding at the end the following new clause: “(iii) In determining the reasonable charge under paragraph (3) for physicians’ services furnished during the 3-month period beginning January 1, 1988, the customary charges shall be the same customary charges as were recognized under this section for the 12-month period beginning January 1, 1987.”; and (B) in subsection (j)(1)(C), by adding at the end thereof the following new clause: “(vii) Notwithstanding any other provision of this subparagraph, the maximum allowable actual charge for a particular physician’s service furnished by a nonparticipating physician to individuals enrolled under this part during the 3-month period beginning on January 1, 1988, shall be the amount determined under this subparagraph for 1987. The maximum allowable actual charge for any such service otherwise determined under this subparagraph for 1988 shall take effect on April 1, 1988.”. (2) Extension of physician participation agreements and related provisions.— Notwithstanding any other provision of law— (A) subject to the last sentence of this paragraph, each agreement with a participating physician in effect on December 31, 1987, under section 1842(h)(1) of the Social Security Act shall remain in effect for the 3-month period beginning on January 1, 1988; 101 STAT. 1330–84 (B) the effective period for agreements under such section entered into for 1988 shall be the nine-month period beginning on April 1, 1988, and the Secretary shall provide an opportunity for physicians to enroll as participating physicians prior to April 1, 1988; (C) instead of publishing, under section 1842(h)(4) of the Social Security Act at the beginning of 1988, directories of participating physicians for 1988, the Secretary shall provide for such publication, at the beginning of the 9-month period beginning on April 1, 1988, of such directories of participating physicians for such period; and (D) instead of providing to nonparticipating physicians, under section 1842(b)(3)(G) of the Social Security Act at the beginning of 1988, a list of maximum allowable actual charges for 1988, the Secretary shall provide, at the beginning of the 9-month period beginning on April 1, 1988, to such physicians such a list for such 9-month period. An agreement with a participating physician in effect on December 31, 1987, under section 1842(h)(1) of the Social Security Act shall not remain in effect for the period described in subparagraph (A) if the participating physician requests on or before December 31, 1987, that the agreement be terminated. (3) (A) Section 1842 of the Social Security Act (42 U.S.C. 1395u) is amended— (i) in subsection (b)(2), by adding at the end the following: In establishing such standards and criteria, the Secretary shall provide a system to measure a carrier’s performance of responsibilities described in paragraph (3)(H) and subsection (h).”; and (ii) in subsection (c)(1), by inserting “(A)” after “(c)(1)” and by adding at the end the following new subparagraph: “(B) Of the amounts appropriated for administrative activities to carry out this part, the Secretary shall provide payments, totaling 1 percent of the total payments to carriers for claims processing in any fiscal year, to carriers under this section, to reward carriers for their success in increasing the proportion of physicians in the carrier’s service area who are participating physicians or in increasing the proportion of total payments for physicians’ services which are payments for such services rendered by participating physicians.”. (B) Section 9332(a) of the Omnibus Budget Reconciliation Act of 1986 is amended— (i) by striking paragraphs (2) and (3), (ii) in paragraph (4)(B), by striking “under paragraph (2)” inserting “under the last sentence of section 1842(b)(2) of the Social Security Act”, and (iii) in paragraph (4)(C)— (I) by striking “under paragraph (3)” and inserting “under section 1842(c)(1)(B) of the Social Security Act”, (II) by striking “April” and inserting “July”, and (III) by striking “at the end of 1987” and inserting “before April 1, 1988”. (b) Extension of Reduction Under Sequester Order.— Notwithstanding any other provision of law (including any other provision of this Act), the reductions in the amount of payments required under title XVIII of the Social Security Act made by the final sequester order issued by the President on November 20, 1987, pursuant to101 STAT. 1330–85 section 252(b) of the Balanced Budget Emergency Deficit Control Act of 1985 shall continue to be effective (as provided by sections 252(a)(4)(B) and 256(d)(2) of such Act) through March 31, 1988, with respect to payments for physicians’ services under part B of such title.